Attached files

file filename
8-K - 8-K - DUPONT E I DE NEMOURS & COa12-10022_18k.htm

Exhibit 99.1

 

 

April 19, 2012

Media Contact:

Michael Hanretta

WILMINGTON, Del.

 

302-774-4005

 

 

michael.j.hanretta@usa.dupont.com

 

Investor Contact:

302-774-4994

 

DuPont Delivers Record First Quarter Earnings of $1.61 Ex-items

Innovation and Productivity Drive Strong Performance

 

·                  First quarter 2012 earnings, before significant items, were $1.61 per share versus $1.52 per share in 2011.  Reported earnings per share were $1.57 versus $1.52 in 2011.

 

·                  Sales of $11.2 billion were up 12 percent versus the prior year.  This reflects 8 percent higher local prices, 1 percent currency headwind, 2 percent lower volume and 7 percent net benefit from portfolio changes. Sales in developing markets grew 15 percent.

 

·                  Segment pre-tax operating income, excluding significant items, increased $252 million, or 12 percent versus the prior year, principally due to Agriculture, Performance Chemicals and the benefit of prior-year acquisitions in Nutrition & Health and Industrial Biosciences.

 

·                  Agriculture delivered 16 percent higher sales and an 18 percent increase in pre-tax operating income, excluding significant items, versus last year’s first quarter. This reflects strong global business performance and an early start to the North American and European selling seasons.

 

·                  The company’s productivity initiatives continued on track with improvements of approximately $100 million each for fixed costs and working capital.

 

·                  DuPont reaffirmed its full-year earnings outlook range of $4.20 to $4.40 per share, which represents 7 to 12 percent growth versus 2011, excluding significant items.

 

“DuPont’s market-driven science and commitment to innovation and productivity are winning in key markets, despite economic headwinds early in the first quarter,” said DuPont Chair and CEO Ellen Kullman.  “Around the world, we are bringing our science closer to local markets by collaborating with customers and partners in our new DuPont Innovation Centers.  We are prioritizing our R&D portfolio to deliver food, energy and protection solutions for the world’s growing population.”

 



 

Global Consolidated Sales and Net Income

 

First quarter 2012 consolidated net sales of $11.2 billion were 12 percent higher than the prior year, including 7 percent attributable to portfolio changes.  Local prices were 8 percent higher with increases in all regions.  The 2 percent decline in total company volume principally reflects strong Agriculture segment volume gains in all regions offset by lower volume for most segments in Asia.  The table below shows regional sales and variances versus the first quarter 2011.

 

 

 

Three Months Ended
March 31, 2012

 

Percentage Change Due to:

 

(Dollars in billions)

 

$

 

% Change

 

Local
Price

 

Currency
Effect

 

Volume

 

Portfolio/
Other

 

U.S. & Canada

 

$

4.8

 

13

 

9

 

 

 

4

 

EMEA*

 

3.2

 

14

 

8

 

(3

)

(1

)

10

 

Asia Pacific

 

2.0

 

 

4

 

1

 

(13

)

8

 

Latin America

 

1.2

 

23

 

15

 

(3

)

4

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Consolidated Sales

 

$

11.2

 

12

 

8

 

(1

)

(2

)

7

 

 


* Europe, Middle East & Africa

 

First quarter 2012 net income attributable to DuPont was $1,488 million versus $1,431 million in the first quarter 2011. Excluding significant items, net income attributable to DuPont was $1,520 million versus $1,431 million in the prior year.  The improvement principally reflects earnings growth in Agriculture and Performance Chemicals and income from a prior-year acquisition.  Higher selling prices more than offset increased spending for sales, marketing and research and development, and higher costs for raw materials, energy and freight.

 

2



 

Earnings Per Share

 

The table below shows year-over-year earnings per share (EPS) variances for the first quarter.

 

EPS ANALYSIS

 

EPS 1Q 2011

 

$

1.52

 

 

 

 

 

Variances vs. 1Q 2011:

 

 

 

 

 

 

 

Local prices

 

.73

 

Variable cost*

 

(.28

)

Volume

 

(.01

)

Fixed cost*

 

(.20

)

Currency

 

(.06

)

Portfolio changes

 

.07

 

Exchange gains/losses

 

(.04

)

Income tax

 

(.06

)

Other

 

(.06

)

 

 

 

 

EPS 1Q 2012 — Excluding significant items

 

$

1.61

 

Significant item - (schedule B)

 

(.04

)

 

 

 

 

EPS 1Q 2012

 

$

1.57

 

 


*      Excludes volume and currency impacts

 

3



 

Business Segment Performance

 

The table below shows first quarter 2012 segment sales and related variances versus the prior year.

 

 

 

Three Months Ended

 

Percentage Change

 

 

 

March 31, 2012

 

Due to:

 

SEGMENT SALES*
(Dollars in billions)

 

$

 

% Change

 

USD
Price

 

Volume

 

Portfolio
and Other

 

Agriculture

 

$

4.1

 

16

 

8

 

8

 

 

Electronics & Communications

 

0.7

 

(17

)

1

 

(18

)

 

Industrial Biosciences

 

0.3

 

nm

 

nm

 

nm

 

nm

 

Nutrition & Health

 

0.8

 

149

 

 

(5

)

154

 

Performance Chemicals

 

1.9

 

6

 

16

 

(10

)

 

Performance Coatings

 

1.1

 

6

 

6

 

 

 

Performance Materials

 

1.6

 

(6

)

6

 

(10

)

(2

)

Safety & Protection

 

0.9

 

(2

)

3

 

(5

)

 

 


* Segment sales include transfers

 

Segment pre-tax operating income (PTOI), excluding significant items, increased 12 percent to $2,377 million, largely driven by higher earnings in Agriculture, Performance Chemicals and acquisition-related improvements in Nutrition & Health and Industrial Biosciences, as shown in the table below.

 

SEGMENT PTOI excluding Significant Items*

 

 

 

 

 

Change versus 2011

 

(Dollars in millions)

 

1Q 2012

 

1Q 2011

 

$

 

%

 

 

 

 

 

 

 

 

 

 

 

Agriculture

 

$

1,314

 

$

1,111

 

$

203

 

18

%

Electronics & Communications

 

33

 

111

 

(78

)

-70

%

Industrial Biosciences

 

41

 

 

41

 

nm

 

Nutrition & Health

 

83

 

25

 

58

 

232

%

Performance Chemicals

 

512

 

394

 

118

 

30

%

Performance Coatings

 

87

 

65

 

22

 

34

%

Performance Materials

 

240

 

288

 

(48

)

-17

%

Safety & Protection

 

100

 

145

 

(45

)

-31

%

Other

 

(60

)

(64

)

4

 

nm

 

 

 

$

2,350

 

$

2,075

 

$

275

 

13

%

Pharmaceuticals

 

27

 

50

 

(23

)

-46

%

Total Segment PTOI

 

$

2,377

 

$

2,125

 

$

252

 

12

%

 


* See Schedules B and C for listing of significant items and their impact by segment.

 

4



 

The following is a summary of business results for each of the company’s reportable segments, comparing first quarter 2012 with first quarter 2011, for sales and PTOI, excluding significant items.  References to selling price are on a U.S. dollar basis, including the impact of currency.

 

Agriculture - Sales of $4.1 billion were up $576 million, or 16 percent, with 8 percent price and 8 percent volume gains.  Seed sales growth reflects strong global performance with robust North American corn sales, a strong, early start to the European season and commercial success in Brazil’s Safrinha season.  Crop Protection product sales growth was underpinned by particular strength in insect control product volumes and price gains across the portfolio.  PTOI of $1.3 billion improved 18 percent on higher volume and price, offset in part by input cost increases and unfavorable currency impact.

 

Electronics & Communications - Sales of $677 million were down 17 percent on 18 percent lower volume.  Sales reflect continued soft demand in photovoltaics, partially offset by increased demand for smart phones and tablets.  PTOI of $33 million declined from lower volume and plant utilization.

 

Industrial Biosciences - Sales of $288 million and PTOI of $41 million reflect the acquisition of Danisco’s enzyme business.  PTOI includes $5 million of amortization expense associated with the fair value step-up of acquired intangible assets.

 

Nutrition & Health - Sales of $808 million and PTOI of $83 million reflect the acquisition of Danisco’s specialty food ingredients business.  PTOI includes $21 million of amortization expense associated with the fair value step-up of acquired intangible assets.

 

Performance Chemicals - Sales of $1.9 billion were up 6 percent, with 16 percent higher selling prices and 10 percent lower volume. Higher selling prices more than offset higher raw material costs.  Lower volume reflects continued softness in titanium dioxide, particularly in Asia Pacific.  Global demand for titanium dioxide increased sequentially.  PTOI of $512 million increased $118 million on higher selling prices.

 

Performance Coatings - Sales of $1.1 billion were up 6 percent on higher selling prices.  Higher selling prices across all regions and market segments offset higher raw material costs.  Continued strong demand in OEM motor vehicle and industrial coatings, particularly in the North American heavy duty truck market, was offset by softening in refinish primarily in southern Europe.  PTOI of $87 million increased on higher selling prices, mix enrichment and continued productivity actions.

 

Performance Materials - Sales of $1.6 billion were down 6 percent, with 10 percent lower volume and a 2 percent reduction from a portfolio change partially offset by 6 percent higher selling prices.  Demand improved in the automotive market, particularly in North America, but was more than offset by continued softness in industrial and electronics markets.  Higher selling prices offset higher raw material costs.  PTOI of $240 million decreased due to lower volume.

 

Safety & Protection - Sales of $941 million were down 2 percent, with 5 percent lower volume, partially offset by 3 percent higher selling prices.  Volume was lower on continued softness in industrial markets.  Higher selling prices reflect value-based pricing.  PTOI of $100 million decreased on lower volume and higher spending for growth initiatives.

 

Additional information is available on the DuPont Investor Center website at www.dupont.com.

 

5



 

Outlook

 

DuPont reaffirms its full-year 2012 earnings outlook of $4.20 to $4.40 per share, an increase of 7 to 12 percent versus 2011, excluding significant items.

 

Use of Non-GAAP Measures

 

Management believes that certain non-GAAP measurements are meaningful to investors because they provide insight with respect to ongoing operating results of the company.  Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in schedules C and D.

 

DuPont (NYSE: DD) has been bringing world-class science and engineering to the global marketplace in the form of innovative products, materials, and services since 1802.  The company believes that by collaborating with customers, governments, NGOs, and thought leaders we can help find solutions to such global challenges as providing enough healthy food for people everywhere, decreasing dependence on fossil fuels, and protecting life and the environment.  For additional information about DuPont and its commitment to inclusive innovation, please visit http://www.dupont.com.

 

Forward-Looking Statements:  This news release contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “estimates” or other words of similar meaning.  All statements that address expectations or projections about the future, including statements about the company’s growth strategy, product development, regulatory approval, market position, anticipated benefits of acquisitions, outcome of contingencies, such as litigation and environmental matters, expenditures and financial results, are forward-looking statements.  Forward-looking statements are not guarantees of future performance and are based on certain assumptions and expectations of future events which may not be realized.  Forward-looking statements also involve risks and uncertainties, many of which are beyond the company’s control.  Some of the important factors that could cause the company’s actual results to differ materially from those projected in any such forward-looking statements are: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; significant litigation and environmental matters; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; security threats, such as acts of sabotage, terrorism or war, weather events and natural disasters; inability to protect and enforce the company’s intellectual property rights; and integration of acquired businesses and completion of divestitures of underperforming or non-strategic assets or businesses.  The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.

 

#   #   #

 

6



 

E. I. du Pont de Nemours and Company

Consolidated Income Statements

(Dollars in millions, except per share amounts)

 

SCHEDULE A

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

Net sales

 

$

11,230

 

$

10,034

 

 

 

 

 

 

 

 

 

Other income, net

 

26

 

25

 

 

 

 

 

 

 

Total

 

11,256

 

10,059

 

 

 

 

 

 

 

Cost of goods sold and other operating charges (a)

 

7,527

 

6,831

 

Selling, general and administrative expenses

 

1,169

 

1,027

 

Research and development expense

 

505

 

399

 

Interest expense

 

114

 

100

 

 

 

 

 

 

 

Total

 

9,315

 

8,357

 

 

 

 

 

 

 

Income before income taxes

 

1,941

 

1,702

 

 

 

 

 

 

 

Provision for (benefit from) income taxes (a)

 

441

 

258

 

 

 

 

 

 

 

Net income

 

1,500

 

1,444

 

 

 

 

 

 

 

Less: Net income attributable to noncontrolling interests

 

12

 

13

 

 

 

 

 

 

 

Net income attributable to DuPont

 

$

1,488

 

$

1,431

 

 

 

 

 

 

 

Basic earnings per share of common stock

 

$

1.59

 

$

1.54

 

 

 

 

 

 

 

Diluted earnings per share of common stock

 

$

1.57

 

$

1.52

 

 

 

 

 

 

 

Dividends per share of common stock

 

$

0.41

 

$

0.41

 

 

 

 

 

 

 

Average number of shares outstanding used in earnings per share (EPS) calculation:

 

 

 

 

 

Basic

 

933,910,000

 

924,897,000

 

Diluted

 

944,238,000

 

940,909,000

 

 


(a) See Schedule B for detail of significant items.

 

7



 

E. I. du Pont de Nemours and Company

Condensed Consolidated Balance Sheets

(Dollars in millions, except per share amounts)

 

SCHEDULE A (continued)

 

 

 

March 31,
2012

 

December 31,
2011

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

 

$

3,410

 

$

3,586

 

Marketable securities

 

191

 

433

 

Accounts and notes receivable, net

 

8,626

 

6,022

 

Inventories

 

6,616

 

7,195

 

Prepaid expenses

 

260

 

151

 

Deferred income taxes

 

706

 

671

 

Total current assets

 

19,809

 

18,058

 

Property, plant and equipment, net of accumulated depreciation (March 31, 2012 - $19,695; December 31, 2011 - $19,349)

 

13,395

 

13,412

 

Goodwill

 

5,443

 

5,413

 

Other intangible assets

 

5,410

 

5,413

 

Investment in affiliates

 

1,121

 

1,117

 

Deferred income taxes

 

4,052

 

4,067

 

Other assets

 

993

 

1,012

 

 

 

 

 

 

 

Total

 

$

50,223

 

$

48,492

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

4,180

 

$

4,816

 

Short-term borrowings and capital lease obligations

 

3,593

 

817

 

Income taxes

 

585

 

255

 

Other accrued liabilities

 

4,178

 

5,297

 

Total current liabilities

 

12,536

 

11,185

 

 

 

 

 

 

 

Long-term borrowings and capital lease obligations

 

11,232

 

11,736

 

Other liabilities

 

14,935

 

15,508

 

Deferred income taxes

 

1,093

 

1,001

 

Total liabilities

 

39,796

 

39,430

 

 

 

 

 

 

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

Preferred stock

 

237

 

237

 

Common stock, $0.30 par value; 1,800,000,000 shares authorized; issued at March 31, 2012 - 1,023,888,000; December 31, 2011 - 1,013,164,000

 

307

 

304

 

Additional paid-in capital

 

10,086

 

10,107

 

Reinvested earnings

 

14,522

 

13,422

 

Accumulated other comprehensive loss

 

(8,465

)

(8,750

)

Common stock held in treasury, at cost (87,041,000 shares at March 31, 2012 and December 31, 2011)

 

(6,727

)

(6,727

)

Total DuPont stockholders’ equity

 

9,960

 

8,593

 

Noncontrolling interests

 

467

 

469

 

Total equity

 

10,427

 

9,062

 

Total

 

$

50,223

 

$

48,492

 

 

8



 

E. I. du Pont de Nemours and Company

Condensed Consolidated Statement of Cash Flows

(Dollars in millions)

 

SCHEDULE A (continued)

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

Cash provided by (used for) operating activities

 

$

(1,877

)

$

(1,484

)

 

 

 

 

 

 

Investing activities

 

 

 

 

 

Purchases of property, plant and equipment

 

(301

)

(323

)

Net (increase) decrease in short-term financial instruments

 

248

 

1,585

 

Forward exchange contract settlements

 

(87

)

(210

)

(Increase) decrease in restricted cash

 

 

(1,991

)

Other investing activities - net

 

(16

)

(26

)

 

 

(156

)

(965

)

Financing activities

 

 

 

 

 

Dividends paid to stockholders

 

(386

)

(383

)

Net increase (decrease) in borrowings

 

2,278

 

1,991

 

Prepayment for the repurchase of common stock (a)

 

(400

)

 

Repurchase of common stock

 

 

(272

)

Proceeds from exercise of stock options

 

389

 

605

 

Other financing activities - net

 

(36

)

(12

)

Cash provided by (used for) financing activities

 

1,845

 

1,929

 

 

 

 

 

 

 

Effect of exchange rate changes on cash

 

12

 

53

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

(176

)

(467

)

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

3,586

 

4,263

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

3,410

 

$

3,796

 

 


(a)

In the first quarter 2012, the company initiated a $400 million share repurchase program, which will be completed no later than May 2012.

 

9



 

E. I. du Pont de Nemours and Company

Schedule of Significant Items

(Dollars in millions, except per share amounts)

 

SCHEDULE B

 

SIGNIFICANT ITEMS

 

 

 

Pre-tax

 

After-tax

 

($ Per Share)

 

 

 

2012

 

2011

 

2012

 

2011

 

2012

 

2011

 

1st Quarter

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer claims charge (a)

 

$

(50

)

$

 

$

(32

)

$

 

$

(0.04

)

$

 

1st Quarter - Total

 

$

(50

)

$

 

$

(32

)

$

 

$

(0.04

)

$

 

 


(a)

First quarter 2012 included a charge of $50 recorded in Cost of goods sold and other operating charges associated with the company’s process to fairly resolve claims related to the use of Imprelis® herbicide, bringing the total charges to $225 at March 31, 2012. The company will continue to evaluate reported claim damage as additional information becomes available. It is reasonably possible that additional charges could result from this evaluation. While there is a high degree of uncertainty, total charges could range as high as $575. The company intends to seek recovery from its insurance carriers for costs associated with this matter in excess of $100. This matter relates to the Agriculture segment.

 

See Schedule C for detail by segment.

 

10



 

E. I. du Pont de Nemours and Company

Consolidated Segment Information

(Dollars in millions)

 

SCHEDULE C

 

 

 

Three Months Ended
March 31,

 

SEGMENT SALES (1)

 

2012

 

2011

 

Agriculture

 

$

4,080

 

$

3,504

 

Electronics & Communications

 

677

 

811

 

Industrial Biosciences

 

288

 

 

Nutrition & Health

 

808

 

324

 

Performance Chemicals

 

1,900

 

1,797

 

Performance Coatings

 

1,050

 

993

 

Performance Materials

 

1,600

 

1,707

 

Safety & Protection

 

941

 

965

 

Other

 

1

 

36

 

Total Segment sales

 

11,345

 

10,137

 

 

 

 

 

 

 

Elimination of transfers

 

(115

)

(103

)

Consolidated net sales

 

$

11,230

 

$

10,034

 

 


(1)             Sales for the reporting segments include transfers.

 

11



 

E. I. du Pont de Nemours and Company

Consolidated Segment Information

(Dollars in millions)

 

SCHEDULE C (continued)

 

 

 

Three Months Ended

 

 

 

March 31,

 

PRE-TAX OPERATING INCOME/(LOSS) (PTOI)

 

2012

 

2011

 

Agriculture

 

$

1,264

 

$

1,111

 

Electronics & Communications

 

33

 

111

 

Industrial Biosciences

 

41

 

 

Nutrition & Health

 

83

 

25

 

Performance Chemicals

 

512

 

394

 

Performance Coatings

 

87

 

65

 

Performance Materials

 

240

 

288

 

Safety & Protection

 

100

 

145

 

Pharmaceuticals

 

27

 

50

 

Other

 

(60

)

(64

)

Total Segment PTOI

 

2,327

 

2,125

 

 

 

 

 

 

 

Net exchange gains (losses) (1)

 

(80

)

(143

)

Corporate expenses & net interest

 

(306

)

(280

)

Income before income taxes

 

$

1,941

 

$

1,702

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

SIGNIFICANT ITEMS BY SEGMENT (PRE-TAX) (2)

 

2012

 

2011

 

Agriculture

 

$

(50

)

$

 

Electronics & Communications

 

 

 

Industrial Biosciences

 

 

 

Nutrition & Health

 

 

 

Performance Chemicals

 

 

 

Performance Coatings

 

 

 

Performance Materials

 

 

 

Safety & Protection

 

 

 

Pharmaceuticals

 

 

 

Other

 

 

 

Total significant items by segment

 

$

(50

)

$

 

 

 

 

Three Months Ended

 

 

 

March 31,

 

PTOI EXCLUDING SIGNIFICANT ITEMS

 

2012

 

2011

 

Agriculture

 

$

1,314

 

$

1,111

 

Electronics & Communications

 

33

 

111

 

Industrial Biosciences

 

41

 

 

Nutrition & Health

 

83

 

25

 

Performance Chemicals

 

512

 

394

 

Performance Coatings

 

87

 

65

 

Performance Materials

 

240

 

288

 

Safety & Protection

 

100

 

145

 

Pharmaceuticals

 

27

 

50

 

Other

 

(60

)

(64

)

Total Segment PTOI excluding significant items

 

$

2,377

 

$

2,125

 

 


(1)     See Schedule D for additional information on exchange gains and losses.

(2)     See Schedule B for detail of significant items.

 

12



 

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

 

SCHEDULE D

 

Summary of Earnings Comparisons

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

%
Change

 

 

 

 

 

 

 

 

 

Segment PTOI

 

$

2,327

 

$

2,125

 

10

%

Significant items (benefit) charge included in PTOI (per Schedule C)

 

50

 

 

 

 

Segment PTOI excluding significant items

 

$

2,377

 

$

2,125

 

12

%

 

 

 

 

 

 

 

 

Net income attributable to DuPont

 

$

1,488

 

$

1,431

 

4

%

Significant items (benefit) charge included in net income attributable to DuPont (per Schedule B)

 

32

 

 

 

 

Net income attributable to DuPont excluding significant items

 

$

1,520

 

$

1,431

 

6

%

 

 

 

 

 

 

 

 

EPS

 

$

1.57

 

$

1.52

 

3

%

Significant items (benefit) charge included in EPS (per Schedule B)

 

0.04

 

 

 

 

EPS excluding significant items

 

$

1.61

 

$

1.52

 

6

%

 

 

 

 

 

 

 

 

Average number of diluted shares outstanding

 

944,238,000

 

940,909,000

 

0.4

%

 

Reconciliation of Earnings Per Share (EPS) Outlook

 

 

 

Year Ended December 31,

 

 

 

2012 Outlook

 

2011 Actual

 

Earning per share - excluding significant items

 

$4.20 - $4.40

 

$

3.93

 

2Q 2012 Sale of an equity method investment - estimate

 

0.08 to 0.09

 

 

Danisco acquisition related costs

 

 

(0.22

)

Customer claims charges

 

(0.04

)

(0.12

)

Charges related to a licensing agreement

 

 

(0.03

)

Sale of a business

 

 

0.13

 

Restructuring charge/adjustments

 

 

(0.01

)

Reported EPS

 

$4.24 to $4.45

 

$

3.68

 

 

13



 

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

 

SCHEDULE D (continued)

 

Reconciliations of Adjusted EBIT / EBITDA to Consolidated Income Statements

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

Income before income taxes

 

$

1,941

 

$

1,702

 

Less: Net income attributable to noncontrolling interests

 

12

 

13

 

Add: Interest expense

 

114

 

100

 

Adjusted EBIT

 

2,043

 

1,789

 

Add: Depreciation and amortization

 

455

 

361

 

Adjusted EBITDA

 

$

2,498

 

$

2,150

 

 

Calculation of Free Cash Flow

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2012

 

2011

 

Cash provided by (used for) operating activities

 

$

(1,877

)

$

(1,484

)

Less: Purchases of property, plant and equipment

 

301

 

323

 

Free cash flow

 

$

(2,178

)

$

(1,807

)

 

Reconciliations of Fixed Costs as a Percent of Sales

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

Total charges and expenses - consolidated income statements

 

$

9,315

 

$

8,357

 

Remove:

 

 

 

 

 

Interest expense

 

(114

)

(100

)

Variable costs (1)

 

(5,137

)

(4,722

)

Significant items - benefit (charge) (2)

 

(50

)

 

Fixed costs

 

$

4,014

 

$

3,535

 

 

 

 

 

 

 

Consolidated net sales

 

$

11,230

 

$

10,034

 

 

 

 

 

 

 

Fixed costs as a percent of consolidated net sales

 

35.7

%

35.2

%

 


(1)     Includes variable manufacturing costs, freight, commissions and other selling expenses which vary with the volume of sales.

(2)     See Schedule B for detail of significant items.

 

14



 

E. I. du Pont de Nemours and Company

Reconciliation of Non-GAAP Measures

(Dollars in millions, except per share amounts)

 

SCHEDULE D (continued)

 

Exchange Gains/(Losses)

The company routinely uses forward exchange contracts to offset its net exposures, by currency, related to the foreign currency denominated monetary assets and liabilities of its operations. The objective of this program is to maintain an approximately balanced position in foreign currencies in order to minimize, on an after-tax basis, the effects of exchange rate changes. The net pre-tax exchange gains and losses are recorded in Other income, net and the related tax impact is recorded in Provision for (benefit from) income taxes on the Consolidated Income Statements.

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

Subsidiary/Affiliate Monetary Position Gain (Loss)

 

 

 

 

 

Pre-tax exchange gains (losses) (includes equity affiliates)

 

$

48

 

$

230

 

Local tax benefits (expenses)

 

(8

)

5

 

Net after-tax impact from subsidiary exchange gains (losses)

 

$

40

 

$

235

 

 

 

 

 

 

 

Hedging Program Gain (Loss)

 

 

 

 

 

Pre-tax exchange gains (losses)

 

$

(128

)

$

(373

)

Tax benefits (expenses)

 

44

 

130

 

Net after-tax impact from hedging program exchange gains (losses)

 

$

(84

)

$

(243

)

 

 

 

 

 

 

Total Exchange Gain (Loss)

 

 

 

 

 

Pre-tax exchange gains (losses)

 

$

(80

)

$

(143

)

Tax benefits (expenses)

 

36

 

135

 

Net after-tax exchange gains (losses)

 

$

(44

)

$

(8

)

 

As shown above, the “Total Exchange Gain (Loss)” is the sum of the “Subsidiary/Affiliate Monetary Position Gain (Loss)” and the “Hedging Program Gain (Loss).”

 

Reconciliation of Base Income Tax Rate to Effective Income Tax Rate

Base income tax rate is defined as the effective income tax rate less the effect of exchange gains/losses, as defined above, and significant items.

 

 

 

Three Months Ended
March 31,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

Income before income taxes

 

$

1,941

 

$

1,702

 

Add: Significant items - (benefit) charge (1)

 

50

 

 

Less: Net exchange gains (losses)

 

(80

)

(143

)

Income before income taxes, significant items and exchange gains/losses

 

$

2,071

 

$

1,845

 

 

 

 

 

 

 

Provision for (benefit from) income taxes

 

$

441

 

$

258

 

Add: Tax benefits (expenses) on significant items

 

18

 

 

Tax benefits (expenses) on exchange gains/losses

 

36

 

135

 

Provision for income taxes, excluding taxes on significant items and exchange gains/losses

 

$

495

 

$

393

 

 

 

 

 

 

 

Effective income tax rate

 

22.7

%

15.2

%

Significant items effect

 

0.3

%

0.0

%

Tax rate before significant items

 

23.0

%

15.2

%

Exchange gains (losses) effect

 

0.9

%

6.1

%

Base income tax rate

 

23.9

%

21.3

%

 


(1)     See Schedule B for detail of significant items.

 

15